Clearer Skies Over China – Coping with Dirty Air and Climate Change

Key Points:

  • A U.S.-Chinese team led by the Harvard China Project has developed a comprehensive framework for evaluating the economic and environmental costs and benefits of national policies to control air pollution and CO2 emissions in China.
  • Contrary to some perceptions of Chinese inaction on air pollution, China’s SO2 control policy of 2006-2010 may have been one of the most swiftly successful air pollution policies on record judged by key criteria: sulfur emissions fell sharply and prevented as many as 74,000 premature deaths from fine particle (PM2.5) air pollution in 2010 alone, all at little economic cost.
  • Looking to the future, a modest tax on carbon dioxide, starting small and rising to about $6.50 per ton in 2020 (in 2007 dollars), could lead to a 19% reduction in China’s CO2 emissions in 2020 compared to a scenario with no tax, with little effect on GDP growth and consumption over the long run.
  • Such a carbon tax would also deliver powerful ancillary benefits: reduced concentrations of an array of domestic air pollutants and prevention of as many as 89,000 premature deaths a year by 2020.
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